Ignore the Hollywood Campaign to End Tipping

As the Golden Globes Awards made a long overdue attempt to atone for a century of sexual harassment in the movie industry earlier this month, one guest seemed curiously out of place.

Saru Jayaraman, co-founder and president of the labor group Restaurant Opportunities Center (ROC) United, attended as actress Amy Poehler’s guest. ROC’s goal is to eliminate the longstanding custom of restaurant tipping. “This system of tipping needs to go,” Jayaraman said.

While eliminating tipping may seem like an odd mission for an activist group to the average person, ROC argues that tipping is to blame for the supposed economic insecurity of restaurant servers. Census Bureau data suggests otherwise, indicating that wait staff are paid quite well.

What does this have to do with the #MeToo and #TimesUp sexual harassment movements and an invite to the Golden Globes? Well, Jayaraman and ROC also make the dubious claim that tipping is to blame for supposed high rates of sexual harassment in the restaurant industry. (The data behind the claim is spotty at best; even ROC’s own survey shows that a majority of tipped workers don’t link tipping to inappropriate workplace behavior.)

Let’s put aside the obvious cognitive dissonance associated with attending a gown-clad gala as a working-class advocate. Doesn’t piggybacking off the ongoing sexual harassment epidemic in the entertainment and media industries hurt the case that tipping is responsible for sexual harassment? Last time I checked, none of Harvey Weinstein or Charlie Rose’s victims received any of their compensation in tips.

Jayaraman’s thinly sourced arguments notwithstanding, it’s common sense that tips do not drive sexual harassment. Bad people do. Surely some exist in the restaurant industry like any other, and they should be rooted out. But eliminating tipping will do nothing to achieve that goal. In fact, eliminating tipping would hurt the exact people Jayaraman claims to help because it would reduce lucrative restaurant management, ownership and server opportunities, the majority of which are held by women.

Why would eliminating tipping reduce restaurant opportunities? Because it would eliminate the slim profit margins on which restaurants operate. Currently some of servers’ total pay comes from tips. If this portion is eliminated, restaurant owners would have to make up the shortfall, overwhelming their relatively meager profit.

Some simple math helps make the point. A standard restaurant with $1 million in annual sales pays about $300,000 in labor and $300,000 in food, leaving the remaining $400,000 to cover rent, maintenance, interest, insurance, credit card processing, repairs, marketing, licensing, use taxes, and legal and accounting fees. Anything that is left is profit — typically around 5 percent of sales.

That 5 percent would disappear many times over if restaurant owners were also expected to pay for the tipped part of their servers’ pay.

I worked alongside thousands of servers in my home state of Maine to help defend the tip credit. Now, we’re taking our fight national: I’ve teamed up with two of my counterparts from Maine, as well as servers in Washington, Minneapolis and Seattle, to launch the Restaurant Workers of America, a non-profit advocacy organization whose mission is to help explain this math in other locales where well-meaning politicians want to put tipping and tip culture at risk.

Activists like Jayaraman are trying to make her argument about the more emotional topic of sexual harassment. That doesn’t mean female restaurant owners, managers and servers are going to let her get away with it. We have a #MeToo story of our own. And it involves succeeding through many years of hard work at restaurants, which we will vigorously defend from activists who earn money attacking restaurants rather than working in them.